Solid building permits and housing starts data, alongside a 30 year high Philly Fed manufacturing index, helped support the Dow yesterday, even if the index was more sluggish than soaring in its approach to hitting a new record peak. However, the winning streak for the S&P 500 and the Nasdaq came to an end as they both edged back from Wednesday’s highs.
Accendo Markets Analyst, Mike van Dulken commented – “The Energy sector weighed across all indices, leading both the S&P and Nasdaq 0.1% lower, while Cisco outperformed having reported Q2 earnings, helping the Dow to close 0.05% stronger.”
As for the dollar, after yesterday’s rate-hiking eyeing excitement, inspired by those surprisingly strong inflation and retail sales readings, the greenback has fallen back. It shed 0.4% against the pound, 0.7% against the euro (itself having a pretty good day despite an uninspiring set of ECB meeting minutes) and 0.8% against the yen.
Spreadex Analyst, Connor Cambell noted – “It is interesting that, despite a fairly inept first month in charge for Donald Trump – with the Muslim ban debacle and now the (re)emerging Russian scandal – the markets are still indulging in this current rally, based on the as yet to materialise trade and tax promises made by the Orange One”
In focus today
It’s another light one for macro data today. There’s UK Retail Sales growth, forecast to have rebounded to positive in January although the annual pace is likely to have continued its slow-down from October’s 10yr peak. This would add to hotter inflation data and slower wages growth earlier in the week, suggesting a weaker GBP beginning to bite through higher import prices.
Meanwhile, day two of the G20 meeting of Foreign Ministers may provide further commentary as US Secretary of State Rex Tillerson finds his feet within the diplomatic arena.